“Carbon neutrality” is undoubtedly one of the hottest topics discussed at the moment. At present, more than 120 countries and 2/3 of the economies in the world have joined the “carbon neutral” transformation. Recently, affected by the rising price of virtual currency represented by Bitcoin, global mining has ushered in an upsurge. While seeking higher computing power, miners have also paid attention to environmental protection issues.
On March 26, the British listed mining company ArgoBlockchain issued a statement stating that it has signed a preliminary agreement with Canadian mining company DMG Blockchain Solutions to launch “the first pure clean energy-driven Bitcoin mining pool”-TerraPool, the mine The pool will be driven by the hydropower resources of the two companies.
“The company’s transformation is of positive significance and will bring a demonstration effect to the energy transformation of the entire mining industry. The mining industry must embrace changes, actively transform, and use standards-compliant energy mining to be more competitive.” Zhang Xiaorong, dean of the research institute, told reporters of China Times.
Bitcoin mining “carbon neutrality” imperative
Argo stated in the statement, “Terra Pool will provide cryptocurrency miners with a strong incentive mechanism and an accessible platform to produce Bitcoin in a sustainable and climate-conscious manner, with the goal of substantially reducing greenhouse gas emissions in the next 10 years.”
Argo CEO Peter Wall believes that environmental protection is the main priority of mining and urges other Bitcoin mining companies to follow suit. “In the near future, Terra Pool will work with like-minded Bitcoin miners to accelerate the transition from traditional energy to clean energy.”
Dan Reitzik, CEO of DMG Blockchain, introduced that this joint venture mining pool is “the only Bitcoin mining pool that requires miners to use green/clean energy.” “Miners use a variety of energy sources around the world, from nuclear energy, hydropower to coal, Many miners are already using renewable energy.”
It is understood that Argo Blockchain has three operating facilities in Canada for mining cryptocurrencies such as Bitcoin. The company recently acquired a piece of 320 acres of land in Texas and plans to use it to expand its mining operations and add 200 megawatts of electricity, but it is not yet known whether this electricity comes from renewable energy.
The energy consumption caused by Bitcoin mining has been criticized for a long time. According to the analysis of the University of Cambridge, the power consumption of Bitcoin in a year exceeds that of the entire country of Argentina. The power consumption in a year is about 127.98 terawatt hours (TWh). According to a survey conducted by the Judge School of Business at the University of Cambridge, only 39% of miners in the world said that their electricity comes from renewable energy sources. Therefore, in the context of global commitment to “carbon neutrality”, it is imperative to use clean energy for mining.
“China Times” reporter noted that at present, many companies have announced the deployment of clean energy mining. On March 19th, Neptune Digital Assets, a blockchain company listed on the Toronto Stock Exchange, and Link Global Technologies, a mining company, have signed a letter of intent to jointly develop some green energy-powered Bitcoin mining facilities in Alberta, Canada. A final agreement will be signed in April this year, and construction will begin immediately thereafter.
The CEO of Neptune Digital Assets stated that he hopes to become a major force in low-cost, “carbon-neutral” mining, to develop a sustainable Bitcoin mining business on a global scale, and to use available carbon in this booming market. Credit for transactions.
In December 2020, the payment company Square stated in the “2020 Corporate Social Responsibility Report” that it will be committed to operating a responsible and sustainable business. At the same time, Square’s main commitments in 2020 include the launch of the Bitcoin Clean Energy Investment Plan, which promises to invest US$10 million to help accelerate the adoption of clean energy in Bitcoin mining.
A few days ago, the Mayor of Miami, Francis Suarez, also said in an interview with the media that Bitcoin mining is regarded as a “energy waste” activity because 90% of mining activities are carried out in countries that cannot use clean energy. But he is full of confidence in Miami’s energy potential. He believes that Miami’s clean energy can solve the mining problem. He hopes to build Miami into a global Bitcoin mining center city.
China will still maintain its leading position
In order to achieve “carbon neutrality”, the development and popularization of clean energy is a long-term task. Before using clean energy, mining equipment with higher performance consumes more energy and consequently more carbon emissions.
Liu Changyong, director of the Blockchain Economic Research Center of Chongqing Technology and Business University, told the reporter of China Times that Bitcoin mining will use low-cost electricity as much as possible on a global scale, and that the efficiency of electricity creation of value is in various industries. tallest. Any move to increase the cost of electricity on a global scale will increase the cost of Bitcoin mining, but will not affect the output and price of Bitcoin, and will only lead to a decline in the profits of miners. The income of high-cost electricity miners decreases and the computing power decreases. As the total supply of Bitcoin remains unchanged, the income of low-cost electricity miners will increase accordingly. Any mining area that increases the cost of electricity will reduce its mining revenue, the mining industry will shrink, and the power utilization efficiency, employment and taxation will drop.
For a long time, China has dominated the Bitcoin mining industry. Data shows that at the end of 2019, China provided nearly two-thirds of the world’s hash power, but in fact, China’s Xinjiang and Inner Mongolia regions have been relying on coal energy to provide mining companies with lower energy prices.
China has pledged to strive for a peak in carbon dioxide emissions before 2030 and strive to achieve carbon neutrality by 2060. “Carbon neutrality” has become one of my country’s highest political tasks. Under this goal, the relevant authorities in Inner Mongolia recently stated that it plans to close all encrypted mining centers by April 2021. This is one of China’s measures to achieve its emission reduction targets.
In this regard, Liu Changyong believes that the carbon emission policy has become stricter. Firstly, the uncertainty of mine operations will increase; secondly, it will reduce the competitiveness of the mining market and reduce the growth rate of computing power. Normally operating mines will be more profitable in the long term.
Will stricter policies shake China’s position in the global Bitcoin mining industry? In this regard, Du Meng, an independent economist and chairman of the China Enterprise Capital Alliance, told the reporter of China Times that the use of cryptocurrency mining will be more and more severely restricted for a long time to come, but it does not mean that there is no opportunity.
Wang Lin, consultant of the Blockchain Joint Development Organization, told this reporter that, first of all, China currently accounts for 65% of all mining capacity, and even exceeded 85% at one time. This advantage should remain for some time; secondly, there are data showing , Hydropower carbon emissions per unit of electricity are only one-fifth of thermal power. While carbon emission policies restrict thermal power mining, it may bring new opportunities for hydropower mining. In the future, Sichuan, Yunnan and other regions dominated by hydropower may accelerate their development with the support of relevant policies.